Nikkei set to rise as yen hits 7-mth low vs dollar

November 20, 2012|Reuters

TOKYO, Nov 21 (Reuters) - The Nikkei is expected to rise onWednesday, led by exporters after the yen hit a seven-month lowversus the dollar on expectations the Bank of Japan will bepushed to take aggressive stimulus action under a newgovernment. Liberal Democratic Party leader Shinzo Abe has called formore extreme steps from the central bank, including "unlimitedeasing", pushing interest rates below zero and directlyunderwriting bonds issue to fund public works, to stimulate theailing, export-reliant economy. His comments ahead of a Dec. 16 election have whipsawed theyen, which hit a seven-month low of 81.80 yen to thedollar on Wednesday. A softer Japanese currency allows exportersto earn more when they repatriate overseas earnings, as well asincreasing their competitiveness. The Nikkei was likely to trade between 9,150 and9,300, strategists said, while Nikkei futures in Chicago closed at 9,215 on Tuesday, up 1 percent from the Osaka close of 9,120. "We don't expect to see big moves today, but the market willlikely rebound within a range," said Hiroichi Nishi, equitygeneral manager at SMBC Nikko Securities. "In terms of sectors,exporters will be in focus because of the weaker yen." On Tuesday, the Nikkei dipped 0.1 percent to 9,142.64,snapping a four-session rally driven by the weakening yen, whilethe broader Topix was flat at 762.04. The benchmark Nikkei is up 8.1 percent this year, boosted bya 5.7 percent rally from Nov. 14 to 19. Still, the Japaneseindex lags a 10.4 percent rise in the U.S. S&P 500 and a10.2 percent gain in the pan-European STOXX Europe 600 index.

STOCKS TO WATCH --PANASONIC CORP Moody's Investors Service cut Panasonic's long-term debtrating by two notches to its lowest investment grade on Tuesday,saying dwindling sales of its consumer electronic devices werepressuring earnings. --SHARP CORP The struggling Japanese TV maker said on Tuesday about 3,000of its workers volunteered for early redundancy, far more thanthe 2,000 it aims to lay off in a bid to trim costs amidmounting losses. --ITOCHU CORP Russian industrial giant EN+ signed an agreement withJapanese trading firm Itochu to build a $500 million gas-poweredelectricity generator that will almost double its Avtozavodskayapower station output.